UPDATE: MLV & Co Downgrades Hersha Hospitality Trust to Hold, Raises PT on Valuation

In a report published Friday, MLV & Co analyst Ryan Meliker downgraded the rating on

from Buy to Hold, but raised the price target from $7.50 to $8.00. In the report, MLV & Co noted, “We are downgrading Hersha Hospitality Trust to HOLD from BUY, but raising our price target $0.50 to $8 resulting in just 8% upside. Following a 35.8% total return since March 1 (vs. the SNL Hotel REIT index total return of 21.6%), we believe the stock is fairly valued. Trading at a 5.8% implied cap rate (adjusted for a 6% FF&E reserve) and at a 14.9x 2015E EBITDA multiple, HT shares now are among the most expensive in our coverage universe, valued at a premium to every lodging REIT except BEE. As such, we do not expect HT to experience relative multiple expansion or cap rate compression from here. Without that, earnings growth would be required to fuel out-performance of the stock, but we expect HT to generate 2015 FFO and EBITDA per share growth comparable to peers. The stock should grind higher on continued growth in RevPAR and NOI, but we no longer expect the shares to meaningfully out-perform. As such, we are downgrading to HOLD but highlight that we would be buyers on a dip below $7.” Hersha Hospitality Trust closed on Thursday at $7.40.